INCOME TAX IN GIBRALTAR

Taxes on income received in Gibraltar are charged through a PAYE style system on current year basis. Single people, married couples, children, dependant relatives, etc, all receive allowances. Mortgage interest, life assurance premiums, pension contributions and building society interest all receive tax relief are all subject to certain conditions. There is no capital gains, wealth or inheritance tax, estate duty or value added tax in Gibraltar.

Personal Income Tax Rates

To ensure residents and people employed in Gibraltar can benefit from the growth of the Gibraltar economy and balance the difference with the new low corporate tax rate, the Government have again reduced the effective personal tax rates.

It was announced that for the Gross Income Based tax system (under this system no allowances and deductions are allowed):

  •  for people with gross incomes between £8,000 and £16,000 per annum, the first £10,000 will be taxed at 8% (previously 10%) and the remainder at 20%
  •  for those with gross incomes between £16,000 and £25,000, new bands are introduced as follows:
    • income: £16,000 - £17,000, tax on the first £6,000 is at 0%
    • income: £17,000 - £18,000, tax on the first £5,000 is at 0%
    • income: £18,000 - £19,000, tax on the first £4,000 is at 0%
    • income: £19,000 - £20,000, tax on the first £3,000 is at 0%
    • income: £20,000 - £25,000, tax on the first £2,000 is at 0%
    • remaining income taxed at 20%.
  •  For individuals with gross incomes between £25,000 and £35,000 the maximum effective tax rate will be 20%.
  •  For individuals with gross incomes between £35,000 and £100,000 the maximum effective tax rate will be 26.25%.
  •  The top rate band of 35% for gross incomes above £100,000 is abolished. The top rate is now just 29%.
  •  For incomes above £100,000 a year the tax rates fall at the first £25,000 20%, £25,001 to £353,000 29%
    (£353,001 to £704,800 20%,£704,800 to £1 million 10%, Excess over £1 million 5% )

  • The allowances and deductions applicable under the other personal income tax system, the Allowances Based System, are all increased by 2.8%. The tax rates under this system remain unchanged.
    All the above mentioned changes will come into effect for the tax year beginning 1 July 2010.